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QUESTION 2 Classify the following statement as true or false
QUESTION 2 Classify the following statement as true or false. Justify the answer. The justification is more important than the classification An increase in the interest rate cannot decrease a saver's future consumption.
3
Classify the following statement as true or false. Justify the answer. The justification is more important than the classification In a monopolistic market the demand function is Q-100 - 2P. The monopolist's marginal cost function is MCQ) - 40. If the monopolist cannot price-discriminate then it will produce 10 units of the good.
Expert Solution
2 An increase in interest rate will increase the future income of the savers. Thus the future income and consumption of savers increase instead of decreasing. But the borrower’s future income and consumption decrease with increase in interest rate.
Answer: True.
3
The statement is true monopolist will produce 10 units of goods.
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